Bankruptcy is almost always the most affordable way to stop creditors and discharge debts if you are having financial difficulties. At Pelley Law Office, L.L.P. we can help you explore all of your debt relief options at the free initial consultation with an experienced attorney. That way, after the initial office consultation, you can decide which avenue best suits your needs in order to reach your financial goals. Our attorneys will work with you personally to help you achieve debt relief.
Contact us today to speak with an experienced Texas bankruptcy attorney.
Debt Relief Options
If you are trying to decide if bankruptcy is right for you, you may be curious as to how it compares to your other debt relief options. Many people struggling with debt look to a debt consolidation company in hopes of avoiding bankruptcy. These companies typically offer to work with your creditors in an attempt to reduce your debt and consolidate it into a payment plan.
We urge you to use extreme caution before hiring a debt consolidation company. Many times, these services can leave you with more problems than you originally had whereas the bankruptcy code can provide you with immediate protection. For instance, the bankruptcy judge can order the unsecured creditors to discontinue charging you interest as soon as the petition is filed. These debt consolidation companies have no such power. Secondly, you will probably be surprised at how much money that you actually have to pay into these debt consolidation companies or debt settlement companies before they will actually start negotiating with your creditors. Almost without exception, debt consolidation or debt settlement is a much more expensive option and more damaging option to your credit score than filing a bankruptcy.
Tax Liability
Another factor to consider is the tax implications each debt relief option presents. For instance, if you work out a debt settlement with a creditor, the Internal Revenue Service will probably consider the forgiven amount as income and leave you with a substantial tax bill. However, under the Internal Revenue Code, an exception to the gross income rule is discharge of indebtedness under the bankruptcy code. In other words, if you have $60,000.00 worth of credit card debt and you file a Chapter 7 bankruptcy and discharge all $60,000.00 then there are no income tax implications. However, if you owe that same $60,000.00 and settle for $20,000.00, then you probably will be taxed on the $40,000.00 that was forgiven. That fact alone justifies learning your bankruptcy options.
Affordable Bankruptcy
Bankruptcy offers debt relief without many of the financial risks that other debt relief options present. In a Chapter 7 bankruptcy, you can typically stop creditors from garnishing your wages, prosecuting civil lawsuits and taking any other invasive actions against you, and overcome your financial problems by discharging your unsecured debt.
In a Chapter 13 bankruptcy, you can get caught up on your house or cars and are typically able to pay most of your small legal fees through the three to five year payment plan. This can be extremely helpful if coming up with the fees upfront is difficult for you.
Every situation is different. Our bankruptcy lawyers will work with you personally to get a clear picture of your financial situation and explain how filing for bankruptcy will impact your financial situation.
Contact Us
Pelley Law Office, L.L.P. is recognized as a leader in the bankruptcy law arena. We have helped thousands of clients file for bankruptcy protection since 1974. Contact us today to speak with an experienced Texas bankruptcy lawyer. We will explain your options, and you will be under no obligation to hire us.
Pelley Law Office, L.L.P. has been named by The United States Congress in Washington, D.C. as a debt relief law firm and we help people file for bankruptcy relief under the Bankruptcy Code.
